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Offline Ayub

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Re: Shariah Compliant Shares
« Sticky post on: April 25, 2016, 12:32:20 PM »
Alphabetic list of All Share Islamic Index comanies (238 Companies)

Symbol   Scrip   Index %
ABOT   Abbott Lab.   1.76
ACPL   Attock Cement   0.68
ADMM   Artistic Denim   0.15
AEL   Arshad Energy L   0
AGIL   Agriautos Ind.   0.14
AGSML   Abdullah Shah   0.01
AHTM   Ahmed Hassan   0.01
AKGL   AL-Khair Gadoon   0
AKZO   Akzo Nobel Pak.   0.25
ALNRS   AL-Noor Sugar   0.03
ALQT   AL-Qadir Textile   0.01
ALTN   Altern Energy   0.34
APL   Attock Petroleum   1
ARM   Allied Rent.   0.12
ARPL   Archroma Pak   0.43
ARUJ   Aruj Industries   0
ASHT   Ashfaq Textile   0.01
ASRL   Associated Serv   0.01
ATBA   Atlas Battery   0.27
ATLH   Atlas Honda Ltd   1.09
ATRL   Attock Refinery   0.58
AVN   Avanceon Ltd   0.1
AWTX   Allawasaya Tex   0.01
AYTM   Ayesha Textile   0.01
BAPL   Bawany Air Products   0
BATA   Bata (Pak)   0.68
BCML   Babri Cotton   0
BERG   Berger Paints   0.05
BFMOD   B.F.Modaraba   0
BHAT   Bhanero Tex.   0.06
BIPL   Bankislami Pak.   0.3
BNWM   Bannu Woollen   0.01
BPL   Burshane LPG   0.04
BRR   B.R.R.Guardian   0.01
BTL   Blessed Tex.   0.02
BUXL   Buxly Paints   0
BWHL   Bal.Wheels   0.03
BYCO   Byco Petroleum   0.57
CCM   Crescent Cotton   0.03
CECL   Climax Eng.   0
CFL   Crescent Fibres   0.01
CHCC   Cherat Cement   0.52
COLG   Colgate Palmo   1.92
CPPL   Cherat Pack   0.25
CSAP   Crescent Steel   0.24
CSM   Cres. Stand.Mod   0
DAAG   Data Agro   0
DAWH   Dawood Hercules   1.53
DCL   Dewan Cement   0.2
DCR   Dolmen City Rei   0.66
DFSM   Dewan Farooque Sp.   0.01
DGKC   D.G.K.Cement   2.05
DIIL   Diamond Ind.   0.01
DINT   Din Textile   0.07
DKL   Drekkar Kings   0
DLL   Dawood Law    0.21
DMTM   Dewan Mushtaq   0
DMTX   D.M.Textile   0
DSIL   D.S. Ind. Ltd.   0
DYNO   Dynea Pakistan   0.02
EFERT   Engro Fert.   2.54
EFOODS   Engro Foods Ltd.   3.22
ELCM   Elahi Cotton   0
ELSM   Ellcot Spinning   0.02
ENGRO   Engro Corp    4.41
FANM   AL-Noor Modaraba   0
FASM   Faisal Spinning   0.04
FATIMA   Fatima Fert.   1.75
FCCL   Fauji Cement    1.57
FECM   Elite Cap.Mod   0
FECTC   Fecto Cement   0.13
FEM   Equity Modaraba   0.01
FEROZ   Ferozsons (Lab)   0.66
FFBL   Fauji Fert Bin   1.28
FFC   Fauji Fert.   3.77
FFLM   1st.Fid.Leasing   0
FHAM   Habib Modaraba   0.06
FIBLM   I.B.L.Modaraba   0
FIL   Fateh Industries   0.01
FIMM   Imrooz Modaraba   0.01
FLYNG   Flying Cement   0.04
FML   Feroze 1888    1.08
FNBM   Nat.Bank Mod.   0
FPJM   Punjab Modaraba   0
FPRM   Paramount Mod   0
FRCL   Frontier Ceram   0.01
FRSM   Faran Sugar   0.07
FUDLM   U.D.L.Modaraba   0.01
GAMON   Gammon Pak   0.01
GATI   Gatron Ind.   0.12
GGGL   Ghani Global Glass L   0.02
GGL   Ghani Gases   0.04
GHGL   Ghani Glass Ltd    0.34
GHNI   Ghandhara Ind.   0.21
GHNL   Ghand Nissan   0.2
GIL   Goodluck Ind.   0
GLAT   Glamour Textile   0.05
GLAXO   GlaxoSmithKline   1.79
GLPL   Gillette Pak   0.15
GRAYS   Grays of Camb.   0.01
GTYR   General Tyre   0.26
GVGL   Ghani Value Gla.   0.01
GWLC   Gharibwal Cement   0.44
HAEL   Hala Enterprise   0
HAFL   Hafiz Limited   0
HAL   Habib-ADM Ltd   0.03
HASCOL   Hascol Petrol   0.48
HCAR   Honda Atlas Cars   1.07
HINO   Hinopak Motor   0.34
HINOON   Highnoon (Lab)   0.3
HSPI   Huffaz Seamless   0.03
HUBC   Hub Power Co.   3.31
HUSS   Hussein Sugar   0.02
IBLHL   IBL HealthCare   0.14
ICI   ICI Pakistan   1.05
ICL   Ittehad Chem.   0.05
IDRT   Idrees Textile   0.01
IDSM   Ideal Spinning   0
IDYM   Indus Dyeing   0.36
IMSL   Imperial Sugar Ltd.   0.01
INKL   Int.Knitwear   0
ISTM   Ishaq Textiles   0
JATM   J.A.Textile   0
JDMT   Janana D Mal   0.01
JKSM   J.K.Spinning   0.04
JOPP   Johnson & Philips   0
JSML   Jauharabad Suga   0
JUBS   Jubilee Spinning   0
KASBM   KASB Mod   0
KCL   Karam Ceramics   0.01
KEL   K-Electric Ltd.   0.45
KHYT   Khyber Textile   0
KOHC   Kohat Cement   1.07
KOHE   Kohinoor Energy   0.19
KOHTM   Kohat Textile   0.01
KOIL   Kohinoor Ind.   0
KPUS   Khairpur Sugar   0.01
KSBP   K.S.B.Pumps    0.08
KTML   Kohinoor Textile   0.56
LEUL   Leather Up Ltd.   0
LINDE   Linde Pakistan   0.07
LMSM   Land Mark Spinning   0
LOTCHEM   Lotte Chemical   0.25
LPGL   Leiner Pak Gelat   0
LPL   Lalpir Power    0.23
LUCK   Lucky Cement   4.81
MACFL   MACPAC Films   0.02
MARI   Mari Petroleum   2.22
MEBL   Meezan Bank   1.14
MLCF   MapleLeafCement   1.33
MODAM   Mod.Al-Mali   0
MQTM   Maqbool Textile   0.01
MTL   Millat Tractors   0.63
MUGHAL   Mughal Iron&Ste   0.24
MUKT   Mukhtar Textile   0
NAGC   Nagina Cotton   0.02
NATF   National Foods   0.85
NESTLE   Nestle Pak    8.84
NETSOL   Netsol Tech.   0.16
NICL   Nimir Ind.Chem.   0.09
NMFL   Nirala MSR Food   0.01
NML   Nishat Mills Ltd   0.92
NPSM   N. P. Spinning   0.01
NRL   National Refin   0.74
NSRM   National Silk   0.03
OLTM   Olympia Textile   0
PAEL   Pak Elektron   0.83
PAKCEM   Pakcem Ltd   0.74
PCAL   Pakistan Cables   0.12
PECO   Pak Engineering   0.03
PGCL   Pak Gum & Chem.   0.01
PHDL   Pak Hotels   0.05
PICT   Pak.Int.Cont   0.86
PIOC   Pioneer Cement   0.58
PKGP   Pakgen Power    0.23
PKGS   Packages Ltd.    1.46
PNSC   P.N.S.C   0.28
POL   Pak Oilfields   1.99
POML   Punjab Oil   0.04
POWER   Power Cement Ltd.   0.1
PPL   Pak Petroleum   7.52
PPP   Pak Paper Prod   0.01
PRL   Pak Refinery   0.36
PSEL   Pak Services   0.45
PSMC   Pak Suzuki    0.91
PSYL   Pak Synthetics   0.03
PTC   P.T.C.L.    1.52
QUICE   Quice Food   0.02
RAVT   Ravi Textile   0
REDCO   Redco Textile   0
REST   Resham Textile   0.05
RMPL   Rafhan Maize    2.22
RUBY   Ruby Textile   0
SASML   Sind Abadgar   0.01
SAZEW   Sazgar Eng.   0.02
SCL   Shield Corp.   0.06
SCM   Stand.Char. Mod   0.03
SEARL   The Searle Co.Ltd.   1.33
SEL   Sitara Energy   0.02
SERT   Service Textile   0
SFLL   SFL Limited   0.06
SGFL   S.G.Fiber   0.05
SHCM   Shadman Cotton   0.01
SHDT   Shadab Textile   0
SHEL   Shell Pakistan   0.79
SHEZ   Shezan Inter.   0.11
SHFA   Shifa Int.Hosp   0.37
SINDM   Sindh Modaraba   0
SITC   Sitara Chemical   0.21
SJTM   Sajjad Tex.   0.01
SKRS   Sakrand Sugar   0
SMCPL   Safe Mix Con.Ltd   0.01
SML   Shakarganj Limited   0.05
SNAI   Sana Industries   0.02
SNGP   Sui North Gas   0.55
SPEL   Synthetic Prod.   0.09
SPL   Sitara Peroxide   0.02
SRVI   Service Ind.Ltd   0.26
SSML   Saritow Spinning   0
STCL   Shabbir Tiles   0.06
STJT   Shahtaj Textile   0.04
STML   Shams Textile   0.01
SURC   Suraj Cotton   0.08
SUTM   Sunrays Textile   0.07
SZTM   Shahzad Tex.   0.01
TATM   Tata Textile   0.01
TELE   Telecard Limited   0.03
TGL   Tariq Glass Ind.   0.13
THALL   Thal Limited   0.56
TOWL   Towellers Limited   0.02
TREET   Treet Corp   0.18
TRSM   Trust Modaraba   0
UBDL   United Brands   0.01
UPFL   Unilever Foods   0.91
WAHN   Wah-Noble   0.01
WYETH   Wyeth Pak Ltd    0.07
ZAHID   ZahidJee Tex.   0.05
ZIL   ZIL Limited   0.01
QURAN 2:32. GLORY BE TO ALLAH, WE HAVE NO KNOWLEDGE EXCEPT WHAT YOU HAVE TAUGHT US. VERILY, IT IS YOU, THE ALL-KNOWER, THE ALL-WISE.

Pakinvestorsguide

Re: Shariah Compliant Shares
« Reply #-1 on: April 25, 2016, 12:32:20 PM »

Ayub

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Shariah Compliant Shares
« on: October 28, 2010, 11:59:55 AM »
Dear Brother,

Assalam o alaikum,

The list of Shariah Compliant Shares is as below. The shares marked with asterisk are the one which are included in the Meezan Investment List but are not listed in KSE  Shariah Stock List. Allah knows best.

Brother Salman Akbar (alias SABIC) can be humbly requested to cross check these shares as per the KMI criterion.

1    Abbott Laboratories (Pakistan) Limited
2    Ados Pakistan
3    Agriautos Industries
4    AL-Ghazi Tractors
5    AL-Noor Suger
6    Artistic Denim Mills
7    Atlas Battery
8    Atlas Honda
9    Attock Cement
10    Attock Petroleum
11    Attock Refinery
12    Balochistan Wheels
13    Bankislami Pakistan
14    Bannu Woollen
15    Bata Pakistan
16    BOC Pakistan
17    Bolan Casting
18    Clariant Pak
19    Clover Pakistan
20    Colgate Palmolive
21    Crescent Steel
22    D.G.K.Cement
23    Dadabhoy Cement*
24    Dewan Farooque Sp.*
25    Dynea Pakistan
26    Fauji Fert Bin
27    Fauji Fertilizer
28    Ferozsons (Lab)
29    Flying Cement
30    Ghandhara Industries
31    Ghandhara Nissan
32    Ghani Automobile
33    Ghani Glass Limited
34    GlaxoSmithKline
35    Grays of Cambridge
36    Habib Sugar Mills
37    Habib-ADM*
38    Hinopak Motor
39    Honda Atlas Cars
40    Huffaz Pipe*
41    IBL HealthCare Ltd
42    ICI Pakistan
43    Indus Motor Company
44    Johnson & Philips*
45    K.E.S.C.*
46   K.S.B.Pumps
47    Kohat Cement
48    Kohinoor Energy
49    Kohinoor Power*
50    Lafarge Pakistan
51    Lotte Pakistan
52    Lucky Cement
53    Maple Leaf Cement*
54    Mari Gas
55    Meezan Bank
56    Mehran Sugar
57    Millat Tractors
58    Modarba Al Mali
59    National Foods
60    National Refinery
61    Nishat (Chunian)
62    Noon Pak
63    Noon Sugar Mills*
64    Oil & Gas Development Company
65    P.S.O.
66    P.T.C.L.A
67    Packages Limited
68    Pak Datacom
69    Pak Elektron
70    Pak Engineering
71    Pak Oilfields
72    Pak Pap.Products
73    Pak Petroleum Ltd.
74    Pak Refinery
75    Pak Suzuki Motor
76    Pak Synthetics
77    Ravi Textile*
78    Sanghar Sugar
79    Sazgar Engineering
80    Searle Pakistan
81    Service Industries
82    Shell Gas LPG
83    Shell Pakistan*
84    Siemens Pakistan
85    Sitara Chemical
86    Sitara Energy
87    Sitara Peroxide
88    Sui North Gas
89    Sui South Gas
90    Tandlianwala Sugar*
91    Tariq Glass
92    Telecard*
93    Thal Ltd
94    Thatta Cement
95    Tri-Pack Films
96    UniLever Pakistan
97    United Distributors*
98    Wah-Noble*
99    Wyeth Pak Ltd.
100    ZIL Limited*

Regards,
Ayub
« Last Edit: February 03, 2012, 03:18:35 PM by M&M »

Ayub

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Re: Shariah Compliant Shares
« Reply #1 on: October 29, 2010, 06:55:39 PM »
Investing in stock market: the Shariah way

Islamic economists and financial experts agree that if certain conditions are met, it is lawful to invest in the stock market. Any earnings that result from such investments will be halal. The logic behind this argument is that when one purchases shares in a company he actually becomes a shareholder and thus becomes a partner in the business. Thus, this arrangement is akin to the Islamic concept of musharakah. However, there are a host of conditions that must be satisfied before one is allowed to invest in stocks. To start with, one must be sure that the business of the corporation/company offering the stock must be halal. Over and above this, shariah scholars have developed certain financial parameters for stocks selection. These are mainly related to the capital structure of the company. The purpose of these criteria is to determine the level of involvement of riba (interest) and gharar (uncertainty) in the overall business of the company.

One should keep in mind that these criteria are the results of modern fiqh scholarship (ijtihad) and therefore, should be seen to represent the current state of thinking on the issue. In that way, they represent the maximum tolerance levels and not the last word on the subject. In short, if a Muslim investor is contemplating investment in the stock market, he must not only be careful about the profitability but also about the compliance of shariah. These can be done by looking at the nature of business, percentage of income from interest and the financial soundness of the company. While there are a number of tools available to help understand the financial soundness of a company there are not many that can guide an investor in determining the shariah compliance of a stock. Following screening patterns may be helpful in determining the shariah compliance of stocks.

Islamic Investment Criteria

A. Qualitative Screens
There are two types of qualitative screens:

i. Industry screening: Is the company in a business that is prohibited or abhorred in Islam? Apart from investment in banking and finance there are a number of business activities that are considered to be prohibited in Islam, and thus investing in these kinds of businesses is not something a Muslim would like to undertake such as alcoholic beverages, pork and pork products, tobacco products, gambling, lottery, pornography and adult oriented material, prostitution and drugs etc.

ii. Business practices: Following shariah principles are applicable to investing and trading practices applicable to individual investors as well as Islamic financial institutions:

a. Investible funds must be free of interest based debt:
The investor cannot borrow on interest to finance his investments, and therefore cannot trade on margin i.e., borrow to purchase shares. Conventional hedge funds, arbitrage funds, and leveraged buy-out (LBO) funds are prohibited for Islamic investors as they all borrow heavily in order to finance their investment practices.

b. Prohibition of speculation
Unlike conventional investors Muslims cannot base their investment decisions on short-term speculation. They cannot enter the market as speculators but only as investors.

B. Quantitative Screens

There are three types of quantitative screens:

i. Debt/Asset Ratio:
Has the company borrowed funds on interest? Ideally there should be no interest-based debt, but based on the Islamic legal principle "li al-akthar hukm al-kul" (to the majority goes the verdict of the whole) and subsequent scholarly opinions, a company is not a permissible investment if debt financing is more than 33% of its capital. This could be calculated as Total Debt divided by Trailing 12-Month Average Market Capitalization (where Total Debt = Short-Term Debt + Current Portion of Long-Term Debt + Long-Term Debt).

ii.Interest-related Income
Does the company generate any interest or interest-related income? This only includes those companies which do not make earning interest their business, but place their surplus funds in investments that yield interest income. As in the previous case, ideally no income should come from interest-related sources. However, looking at the current situation shariah scholars have permitted to invest in stocks of companies whose income from interest forms less than 5% of a company's total income. Some scholars have fixed that ceiling at 10% of a company's total income.

iii. Monetary Assets
To invest in shariah compliant companies, one has to be very careful about company's monetary assets. Accounts receivables and liquid assets such as bank accounts and marketable securities have to be below the limits fixed by shariah scholars for the investment to be permissible. Some scholars have set this minimum at 51% whereas the majority of shariah scholars agree that "Accounts Receivables" should not be over 45% of company's total assets (where Accounts Receivables = Current Receivables + Long-Term Receivables).

C. Trading Practices

i. Day Trading
Day trading has little to do with actual investing. Usually day traders watch the market and buy and sell on short-term price fluctuation (normally within one day). For this reason, a number of Islamic scholars have termed this as closer to gambling and thus it is prohibited.

ii. Margin Trading:
Margin trading is buying stocks using money loaned from the broker. Interest is paid for this loan, and therefore it is prohibited. Moreover this is a very risky (and complicated) practice, as one can lose more than what he has borrowed.

iii. Derivatives - Options and Futures
Option is purchasing the right to buy or sell a stock or a commodity at a future date for a fixed price (regardless of the then prevailing price in the market). Exercising this option means buying at the price set in the past. Not exercising the option results in the investor paying the option fee. A great majority of scholars are of the opinion that Futures trading is not permitted in Islam.

iv. Short Selling:
Short selling is borrowing a stock from the brokerage firm and selling it in anticipation that the stock price will further go down. Once the prices are a bit stabilised the stock is purchased back to square up the sale transaction. Thus, the investor as a "shorter" keeps the difference. This transaction involves huge risk that almost has no upper limits. Moreover, from shariah point of view you cannot sell what you do not posses.

* The author is PhD in Islamic Economics. At present he is Investment Consultant and Joint Editor Islamic Economics Bulletin. He can be contacted at: shariqnisar@yahoo.com
http://www.zaharuddin.net/index.php option=com_content&task=view&id=164&Itemid=72


Offline Poker Face

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Re: Shariah Compliant Shares
« Reply #2 on: October 29, 2010, 07:46:58 PM »
Baat bohat important hai agar samajh mein aa jaye to.
Thanks.
Mujhe yeh sabbaq bohat pehle hi mil gaya tha. :thanks:
TOP PICKS : PSO PPL NML NCL MEBL ATBA TGL CSAP FECTC

Ayub

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Re: Shariah Compliant Shares
« Reply #3 on: November 01, 2010, 07:00:03 PM »

Offline Poker Face

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Re: Shariah Compliant Shares
« Reply #4 on: November 01, 2010, 08:47:07 PM »
What about Dawood Hercules? Is it shariah compliant share or not?
TOP PICKS : PSO PPL NML NCL MEBL ATBA TGL CSAP FECTC

Offline Salman Akbar

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Re: Shariah Compliant Shares
« Reply #5 on: November 01, 2010, 10:02:39 PM »
NO DAWH currently doesn't fall under shariah compliance because of their debt/asset ratio


Ayub

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Re: Shariah Compliant Shares
« Reply #6 on: November 16, 2010, 09:08:26 AM »
Deleted please.


« Last Edit: January 21, 2011, 04:49:17 PM by Ayub »

Offline DK

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Re: Shariah Compliant Shares
« Reply #7 on: November 16, 2010, 10:57:28 AM »
Ayub can you comment on why arabs invest in forex, NYSE, DOW JONE ...etc ?

Ayub

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Re: Shariah Compliant Shares
« Reply #8 on: November 16, 2010, 11:14:19 AM »
Deleted please.
« Last Edit: January 21, 2011, 04:50:59 PM by Ayub »

Offline Dr nouman

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Re: Shariah Compliant Shares
« Reply #9 on: November 26, 2010, 09:02:23 AM »
can anyone plz advise...... short selling is halal or haram in accordance with shariah .......
 :thanks:
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Offline Khawar

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Re: Shariah Compliant Shares
« Reply #10 on: November 26, 2010, 09:22:22 AM »
can anyone plz advise...... short selling is halal or haram in accordance with shariah .......
 :thanks:

Absolutely haraam... no doubt whatsoever

Offline Dr nouman

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Re: Shariah Compliant Shares
« Reply #11 on: November 26, 2010, 09:29:47 AM »
 :thanks:
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PPL,  NML, NCL, FATIMA, FFC, KAPCO, NPL, DGKC, PKGP, SAZEW, CYAN, BYCO, PSO,EPCL,
SNGP, NCPL, KEL, EPQL, SPWL, CSAP,

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Re: Shariah Compliant Shares
« Reply #12 on: November 26, 2010, 09:36:24 AM »
can anyone plz advise...... short selling is halal or haram in accordance with shariah .......
 :thanks:

Absolutely haraam... no doubt whatsoever

I totally agree. Selling what you don't have is definitely haraam. This is the reason people generally think the shares trading is haram.

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Re: Shariah Compliant Shares
« Reply #13 on: November 26, 2010, 10:30:20 AM »
can anyone plz advise...... short selling is halal or haram in accordance with shariah .......
 :thanks:
You cannot sell which you do not own, so it is definitely haraam.

Ayub

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Re: Shariah Compliant Shares
« Reply #14 on: November 26, 2010, 12:12:18 PM »
SHORT SELLING - EXTRACT FROM AN ARTICLE "PRESENT FINANCIAL CRISIS CAUSES AND REMEDIES FROM ISLAMIC PERSPECTIVE"

By

Justice Mufti Muhammad Taqi Usmani

5-Necessary Ingredients of Trade

Trade, as generally understood even by a layman, is an activity whereby a person transfers his ownership to another person for a consideration. This concept itself presumes that, when undertaking a trade transaction, the transferor has the ownership of what he is transferring to the opposite party. The logical result of this concept is that one cannot sell what he does not own.

This is not only a logical requirement of a valid sale, but also a religious imperative in Islamic jurisprudence, which is based on the following instruction of the Holy Prophet Muhammad (PBUH)

Do not sell what you do not have.[15]

Not only this, but the Holy Prophet (PBUH) has also directed that one cannot sell anything unless he has it in his possession.[16] In this regard, the Holy Prophet (PBUH) has established a rule of wide application that one cannot earn a profit by selling a commodity the risk of which he did not assume.[17] Since the risk of the sold commodity is not passed on to the buyer unless he has acquired its physical or constructive possession, the buyer cannot sell it to a third party, unless he has taken its delivery either physically or in a constructive manner, e.g. through one’s agent, or through a document that gives him full control over the sold item.


Short Sales:

But most of today’s speculative sales are carried out without ownership. Short sales and blank sales are predominant in speculative markets, and that is one of the reasons why their transactions do not qualify as being real trade.

The second aspect of a genuine trade is that the buyer really wishes to have the purchased goods delivered to him, either for his own consumption or for the purpose of onward sale. But in most speculative transactions, delivery of sold goods or stocks is totally out of question. The speculators do not purchase things with the intention of taking their delivery. They are interested only in fluctuation of the prices, and after undertaking a number of transactions, one after the other, they end up with paying or receiving the difference of prices only, which makes the system closer to gambling, rather than commercial business. Sir Ernest Cassell, a banker, is reported to have said to Edward vii:

“When I was young, people called me a gambler. As the scale of my operations increased, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time.”[18]


It is this aspect of speculation that creates problems. Obviously, trade and gambling are two different things with totally different objectives. When trade is mingled with or merged into gambling or semi-gambling, it makes the whole system a hotchpotch, which can never operate in a smooth manner. If speculation is isolated from short sales, blank sales and fictitious transactions ending up with settling price differences only, it cannot cause crises.

http://www.muftitaqiusmani.com/index.php?option=com_content&view=article&id=41:present-financial-crisis-causes-and-remedies-from-islamic-perspective-&catid=12:economics&Itemid=15http://

Ayub

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Re: Shariah Compliant Shares
« Reply #15 on: November 26, 2010, 12:26:20 PM »
(Continued from previous post)

It is this aspect of speculation that creates problems. Obviously, trade and gambling are two different things with totally different objectives. When trade is mingled with or merged into gambling or semi-gambling, it makes the whole system a hotchpotch, which can never operate in a smooth manner. If speculation is isolated from short sales, blank sales and fictitious transactions ending up with settling price differences only, it cannot cause crises.

http://www.muftitaqiusmani.com/index.php?option=com_content&view=article&id=41:present-financial-crisis-causes-and-remedies-from-islamic-perspective-&catid=12:economics&Itemid=15[url]]http://www.muftitaqiusmani.com/index.php?option=com_content&view=article&id=41:present-financial-crisis-causes-and-remedies-from-islamic-perspective-&catid=12:economics&Itemid=15http://

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Re: Shariah Compliant Shares
« Reply #16 on: November 26, 2010, 12:49:13 PM »
Mufti sahab is a very respected scholar, but please read through this statement very carefully. He is making a case against speculation and gambling. If shorting due to an expected share price decline is speculation then buying based on the expectation of share price appreciation is also speculation.

Mufti sahib, very rightly, explained what would be considered an un-acceptable practice in Islam but did not declare short selling haram. The reason for that would be to determine if the un-acceptable practice applies to short sale. You are not earning a profit, that will only be confirmed when you complete the transaction.

The definition of how short selling works in just to explain the methodology of the transaction in layman terms (and not for ijtehad). It is not the same as me selling your goats/ cows even though I dont even know you or vice versa.

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Re: Shariah Compliant Shares
« Reply #17 on: November 26, 2010, 01:28:14 PM »
BTW thanks for the link, I have printed the entire article and will read it in the evening.

Ayub

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Re: Shariah Compliant Shares
« Reply #18 on: November 26, 2010, 02:16:12 PM »
Transactions & Dealings  Shares & Investments  (Fatwa Darul Ifta, Darul Uloom Deoband)   

Question: 5124   

India.

Assalam alaikum I am a day trader of stocks. Is it permissible to short sell in Islam. Short selling is the selling of a stock that the seller doesn't own at the time of selling them. He sells them in the hope that the price of those shares will decline, and he will profit by buying back those shares at a lower price. Waiting for your reply. Jazakallah!   

Answer: 5124    21 Jun, 2008 (Fatwa: 776/739=D/1429)

It is not allowed to sell an item which one does not own and possess, it is prohibited in Hadith. Therefore, making day-trading when you do not possess is not permissible.

Allah (Subhana Wa Ta'ala) Knows Best

Darul Ifta, Darul Uloom Deoband

http://webcache.googleusercontent.com/search?q=cache:iu71Jyv3VyMJ:darulifta-deoband.org/viewfatwa.jsp%3FID%3D5124+Fatwa+stock+5124&cd=1&hl=en&ct=clnk&gl=pkhttp://

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Re: Shariah Compliant Shares
« Reply #19 on: November 26, 2010, 03:15:49 PM »
Ayub sahib, once again, I do not question the following,

"It is not allowed to sell an item which one does not own and possess"

What I question is the explanation,

"Short selling is the selling of a stock that the seller doesn't own at the time of selling them"

This is a layman's way of explaining a complex transaction. Please do not treat stocks or shares as commodity items.

Once again, I am not saying I am right, I am just arguing that the case being presented to the ulemas is not right. It is more complex than that. And with all due respect, ulemas end up responding to " selling...that the seller doesn't own at the time of selling" without understanding the finer intricacies of short selling.

btw, for disclosure reasons, i do not short sell due to margin requirements and some other principle reasons.




« Last Edit: November 26, 2010, 03:20:29 PM by buy.high.sell.low »